We talk about the world economic crisis, though Asians sometimes prefers to see it as a north Atlantic crisis and a few Brits as the eurozone crisis. It is all of those things, but seen through a less self-centred prism it is also a crisis of the Mediterranean, one of the oldest and most fruitful nurseries of human progress in history.

The Mediterranean crisis is not confined to Italy or Greece, tottering as both now are, threatening to inflict a fresh recession – or worse – on the wider EU.

Look at the bigger picture and every country around the Middle Sea – Rome's "mare nostrum", their version of the "English Channel" – and almost all are gripped by instability or uncertainty.

Head east from Greece and we find a moderate Islamist government of the Justice and Development party ruling Turkey, committed to pluralism and making great economic strides, but also worrying its secular elite with prosecutions, reforms and policy actions, which put the country's future path in doubt.

A great geopolitical crossroads between Europe and Asia, Turkey is reasserting itself in the neighbouring Arab world which – as the Byzantine, later Seljuk and Ottoman empires – it ruled for centuries. Which way will it turn, east or west, and will that turn be friendly? Next door is Syria, stable and autocratic in its post-imperial incarnation until the Arab spring convulsed it again. What will happen to the Assad regime and what kind of government – secular, nationalist, Islamist – will take its place?

And so on. Beautiful but fragile Lebanon is squeezed and manipulated by more powerful neighbours, notably Syria and Israel, though distant Iran has some Shia leverage there too.

Israel is the perennial odd man out, its enormous strengths and weaknesses camouflaged by its military prowess and American patronage.

Egypt? Who can say what happens there? The military coup which overthrew the Mubarak regime in response to February's popular uprising has not yet justified the euphoria of the Arab spring.

As in Libya, just west of Egypt on the north African shore, we will have to wait and see what happens next as Nato retreats to its Italian bases and western promises of democracy-building kits fail to materialise.

In next-door Tunisia – formerly Carthage, vanquished in its fight for Mediterranean supremacy by ancient Rome, long the domain of Barbary pirates in more unruly epochs – the Islamic party won most seats in the election with promises of pluralism, modernity and plenty of women MPs.

Fingers crossed, but when the Islamic party won the first round of elections in Algeria in 1991 – beating the nationalists who had fought the French for independence – the army stepped in, triggered a bloody civil war and has been choosing the president ever since.

The state of emergency was finally lifted last spring in response to events elsewhere and the country edges forward thanks chiefly to the high price of its oil and gas. It is not a stable recipe for progress.

Morocco, not being cursed with oil wealth, leads a quieter life under a powerful monarchy which has just introduced a new constitution and has allowed the opposition into government on occasion.

Despite its moderation (the further away from Mecca the better for Muslim states) the Madrid train bombers – whose timing shaped Spain's last election result in 2004 – came from Morocco. So did Franco in 1936.

Spain, reconquered from Islam after centuries of occupation just as eastern Islam – the Ottomans – were pressing hardest against the Hapsburgs, has finally rejoined mainstream Europe since the death of Franco after long being on its fringe.

But it joined the eurozone – symbol of modernisation for so many post-dictatorship states in Europe – in 2002, enjoyed a housing and credit boom like others and is now in trouble, despite having lower debts than Italy and a more resilient economy than Britain.

The credit agencies have just downgraded its long-term credit rating from AAA to AA- because of insufficient growth, high levels of public debt and unemployment: being inside the euro as currently configured requires an "internal devaluation" – austerity – to restore competitiveness. In consequence of this and other problems the socialist Zapatero government now looks set to fall in the elections scheduled for 20 November.

It means another EU government has fallen since the banking crisis first broke. Who could possibly be next, Nicolas Sarkozy must be wondering? The president of France, that most blessed of Mediterranean shoreline states, faces re-election next spring. Like Barack Obama (he's an Hawaiian islander, not of Mediterranean stock) Sarko may be lucky in his main opponent, the socialist François Hollande, who has a beatable air about him.

But the rightwing National Front (NF) beat the left into the runoff against Jacques Chirac two elections ago and Marine Le Pen looks and sounds a smarter bet than her old ex-paratrooper dad, Jean-Marie. In dangerous times, anything could happen.

What unites this disparate group of states apart from access to one of the world's loveliest little seas and much shared history? For the first time since the decline of the Ottomans in the late 16th century, wealth and population are starting to shift south and east again, just as the Muslim world re-enters Europe, this time via peaceful (so far) immigration.

Who he, you ask? What short memories we have. Bouazizi was the 26-year-old Tunisian fruit and veg vendor who set fire to himself in despair after his livelihood was wiped out by an arbitrary act of police confiscation.

He lost apples, pears and bananas worth $44 and second hand scales worth $179 — barely £150 worth, but the means by which he supported his family.

De Soto's article dwells at length upon the details. The merchandise had been bought on credit that could not now be repaid. His scales represented lost capital. His vendor's right to trade on a public square had been rescinded. He had no salary and no legal title either to his home or his business, both tied up by costly and time-consuming red tape.

Millions of Arabs are said to see Bouazizi as themselves. His brother told De Soto that Tarek's wish for his fellow-Arabs, the improvement that would justify his sacrifice, would have been "that the poor also have a right to buy and sell".

Such talk is being echoed with increasing despair across the Mediterranean in societies which have grown used to standards of living which – though not all affluent – have become more secure and affluent in the past 50 years, sustained by sophisticated institutions, more honest than not, that the ramshackle (mostly) Arab world still lacks. Credit, incidentally, is one of them.

We are starting from very different positions (Silvio Berlusconi has a flamboyant Gadaffi-ish style not evident in the Lutheran Angela Merkel) but we all want similar things.

There are no easy lessons to draw from such a story. Eurosceptics who will pounce on red tape as proof that governments are always the problem might wisely ponder that the absence of strong and effective government has been a fundamental failure in the eurozone crisis since 2008.

Euro-federalists and other pro-state idealists might wonder if they were right to seek to impose such uniformity – including a currency – on heterogeneous Europe, whose diversity has usually been a strength.

Either way, competent and honest politics is only a means to an end. All around the Med people want jobs, homes and security that allows them to get on with their lives. At bottom "it's the economy, stupid", but not just that. We forget the basics at our collective peril.